The governor of Norway’s central bank says western Europe’s biggest oil producer is facing a major economic slowdown as crude prices continue to plunge.
“Our job now is that we need to prevent a severe downturn in the economy,” Oeystein Olsen said today in an interview after a press conference in Oslo. “Overall, that is presently the major concern of the board. That explains why we have reduced the rate.”
Olsen cut Norway’s main interest rate today by 0.25 percentage point to 1.25 percent, a move that shocked markets and sent the krone down almost 2 percent against the euro. The decision came after almost three years of unchanged rates and marked a shift away from a policy that had sought to prevent excessive monetary easing from fueling house price growth.
